Brazil's top court approves new graft probe of President Temer

BRASILIA (Reuters) - A Brazilian Supreme Court judge on Tuesday authorized an investigation of President Michel Temer for suspected corruption involving a decree regulating ports, adding to graft allegations the president has so far parried with backing from Congress.

Brazil's President Michel Temer smiles during a meeting with trade unionists at the Planalto Palace in Brasilia, Brazil September 12, 2017. REUTERS/Adriano Machado

The new investigation is based on a wiretapped conversation of a former Temer aide, Rodrigo Rocha Loures, who, according to court documents, discussed shaping the decree in return for bribes channelled from a port operator to the president.

In his ruling, Justice Luis Roberto Barroso said the new probe was warranted because Brazil’s top prosecutor, Rodrigo Janot, had found “strong indications” of crimes, given that the decree signed by Temer answered part of the demands made by logistics firm Rodrimar SA.

Temer’s lawyer said in a statement sent to the Supreme Court that the allegations against the president are “contaminated by untruths and malicious distortions.”

The decree was publicly debated and benefited all port operators and not just Rodrimar, it said.

Rodrimar also denied that it had received any special treatment from the government. The company said the decree in question partially addressed widespread demands from Brazil’s port operators.

Temer has denied any role in the corruption scandals that have come to light during a sprawling three-year investigation of political bribery in Brazil.

His lawyers have also challenge the plea bargain deal that yielded the wiretap of Rocha Loures, arguing that the billionaire beef tycoon who arranged the recordings was unfairly favoured by a close aide to Janot.

Last month, Temer’s allies in Congress easily blocked a corruption charge levelled by Janot. He is also expected to beat additional charges that Janot could level this week before leaving office. The latest investigation approved by the court adds more allegations to the mix.

Brazil’s currency, the real BRBY, posted its biggest daily drop in nearly a month, slipping 0.8 percent against the U.S. dollar as the investigation and a separate police probe into Temer’s allies kept pressure on the president.

Temer’s success in beating back accusations had bolstered bets that he would be able to return focus to his market-friendly proposals to overhaul Brazil’s tax and social security policies, tackling a record deficit.

Reporting by Ricardo Brito; Writing by Anthony Boadle and Brad Haynes; Editing by David Gregorio and Grant McCool